Sensex crashes after Budget: Here’s the one move that triggered investor panic

Markets tumble immediately after the 2026-27 Union Budget as STT on futures and higher buyback capital gains taxes trigger investor panic.

The Indian stock market witnessed a sharp decline today immediately after Finance Minister Nirmala Sitharaman presented the Union Budget for 2026-27 in the Lok Sabha. Within just 13 minutes of the budget announcement, investors faced massive losses amounting to approximately ₹13 lakh crore. The sudden sell-off pushed the Sensex down by 2,000 points, while the Nifty 50 fell by 400 points, reflecting widespread market panic.

Despite being hailed as the “Excellence Express Budget,” the markets reacted negatively due to specific taxation measures announced in the budget. The primary reason for the steep decline was the increase in Securities Transaction Tax (STT) on futures purchases, which was raised from 0.02% to 0.05%. This sudden hike triggered fear among investors, prompting many to offload their shares rapidly.

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Adding to the market stress, the budget also imposed higher capital gains taxes on share buybacks. Corporate promoters will now pay 22% capital gains tax on buybacks, while non-corporate promoters face a 30% tax rate. Market analysts noted that these changes directly affected investor sentiment, causing one of the sharpest intraday drops in recent years.

Experts clarified that, apart from the STT increase and buyback-related capital gains taxes, there were no other major factors contributing to the market decline. Analysts also highlighted that while the budget focuses on strengthening fiscal policies and ensuring better tax compliance, the immediate market reaction reflects short-term volatility rather than a long-term economic outlook.